Business

The Only Reasons To Pay Off A Low-Interest-Rate Mortgage Early

Despite the wonderful peace of mind that comes with owning a home free and clear, deciding to pay off a low-interest rate mortgage early is not always straightforward. If your mortgage rate is low compared to risk-free investment returns, keeping the mortgage and investing excess cash elsewhere often makes more financial sense.

Table of Contents

What Is Considered a Low-Interest Rate Mortgage?

I define a low-interest rate mortgage as one where the rate is at or below the risk-free rate of return. The risk-free rate can be equivalent to a Treasury bill or bond of your choice, or even the current money market rate you can earn on your cash.

For example, if your mortgage rate is 4% while money market accounts are offering 4.2%, then your mortgage qualifies as low-interest. Conversely, if you have a 2.5% mortgage but 10-year Treasury bonds are yielding only 0.6%, that mortgage isn’t truly low-interest because alternative risk-free investments aren’t offering better returns. Additionally, if inflation is running at 7% while your mortgage rate is 5%, you effectively have a negative real mortgage rate, making your debt cheaper over time.

When evaluating whether to pay off your mortgage early, you must always consider the opportunity cost of investing that money elsewhere. Finance decisions should never be made in a vacuum.

The 10-year Treasury bond yield, in my opinion, is the most important financial figure to track because it serves as a benchmark for financial relativity. With this perspective in mind, let’s go over the only good reasons to pay off a low-interest rate mortgage early.

Percentage breakdown of interest rates on outstanding mortgages, 73% of mortgage borrowers have an interest rate under 5% according to FHFA. Nobody wants to give up their low-interest rate mortgag-

The Only Good Reasons to Pay Off a Low-Interest Rate Mortgage

I’ve paid off several low-interest rate mortgages since I started buying real estate in 2003. Here are the few legitimate reasons I’ve found for doing so.

1) You No Longer Want to Own Your Home or Investment Property

The simplest way to pay off a mortgage is by selling the property. If your home’s value exceeds the loan balance, the mortgage gets paid off automatically in the transaction. There’s no need to aggressively save to pay it down early over many years. The main challenge is going through the selling process, which can take 30–45 days on average.

There are many reasons you might want to sell: relocating for work, retiring, downsizing, upsizing, or simply wanting less responsibility.

For example, in 2017, after my son was born, I no longer wanted to be a landlord for a four-bedroom house that had turned into a party home. With four or five young guys living there, my neighbors occasionally complained about noise and reckless behavior. So, I sold the property and eliminated my 4.25% mortgage. I then reinvested the home sale proceeds into stocks, municipal bonds, and private real estate in roughly equal proportions.

The relief of no longer managing that rental alone was worth not making any additional returns from the proceeds. Fortunately, the stock and private real estate markets continued to appreciate, making it a win-win situation.

2) You Have a Specific and Better Use for Your Home Equity

Money is most powerful when it has a defined purpose. Setting clear goals for your savings and investments makes financial decisions easier and more disciplined.

As you pay down your mortgage and home values rise, your equity grows. While many homeowners sit on their equity for decades, some may find better uses for it.

Here are some valid reasons to use home equity elsewhere:

Rotating capital into a better investment – If real estate has outperformed for years and another asset class (like stocks or bonds) looks more attractive, you might decide to cash out and diversify. Conversely, if your home has appreciated significantly, but residential commercial real estate has not, you could rotate into the underperformer.
Paying for college tuition – If you purchased a rental property when your child was born, you could sell or refinance it to help fund their education 18 years later.
Funding your retirement – Many retirees downsize and cash out equity to simplify their finances and reduce costs.

Using home equity strategically can unlock new financial opportunities, as long as the alternative investment or use of funds is well thought out.

3) Your Real Estate Exposure Has Grown Too Large

Everyone should have a target asset allocation for real estate relative to their total net worth. If property values surge, you may find yourself overexposed to real estate, prompting a need to rebalance.

Some common scenarios where this happens include:

A prolonged real estate bull market increases your property’s value disproportionately.
You buy a new dream home before selling your old one, temporarily holding more real estate than planned.
A stock market crash reduces your non-real estate assets, making real estate a larger percentage of your portfolio.
You inherit a property unexpectedly, further increasing your real estate exposure.

If your target real estate allocation is 50% of net worth, try to keep it between 40% and 60%. Anything outside that range may justify selling a property and reallocating funds.

4) You Are Fed Up with Local Government And Property Taxes

As property values rise, so do property taxes. At some point, you may feel that your tax burden is excessive, especially if you believe local government mismanages funds or fails to address key issues.

While property taxes fund essential services like schools and public safety, government inefficiencies and corruption can erode trust. Some homeowners reach a breaking point and decide to sell rather than continue funding a government they don’t support.

The Most I’m Willing to Pay in Property Taxes

For me, the maximum amount I’m willing to pay in property taxes is $100,000 a year. Property taxes fund public schools, emergency services, and infrastructure—things I fully support. But beyond that threshold, my willingness to pay more depends entirely on how well my city government actually serves its residents.

If the new mayor steps up—tackling corruption, cracking down on drug dealers and violent criminals, and cleaning up the streets—I’d consider paying more. But if the status quo remains—wasteful spending, ineffective policies—then I’d rather put my money elsewhere.

The Frustration of Paying Huge Taxes for Broken Governance

Imagine this: You’ve paid over $1 million in property taxes over the past 20 years. You take pride in maintaining your home and community. Then, one day, a San Francisco city official slaps a notice on your door saying your planter boxes—on your own property—are too high. They give you 30 days to remove them or face a $3,000 fine, plus an additional $100 per day for noncompliance.

Meanwhile, rampant drug use leads to overdoses in broad daylight. Retail theft is so bad that major stores are closing their doors. Homeless encampments grow while city officials dither. And yet, instead of addressing these real issues, the government focuses on policing planter boxes.

Paying property taxes is one thing. Watching that money get squandered while the city deteriorates is another.

5) Your Adjustable-Rate Mortgage (ARM) Is Resetting to a Higher Rate

If you have an adjustable-rate mortgage (ARM), you might face a sharp increase in your mortgage rate once the fixed period ends.

For example, suppose you took out a 7/1 ARM at 2.5%, and now, after seven years, it’s resetting to 4.5%. Over those years, you’ve built equity and increased your savings. Instead of letting the rate adjust, you could pay off the mortgage or pay down a large portion and recast the loan for lower payments.

If you choose not to refinance your ARM and stick with it, your interest rate could eventually reach its maximum allowable limit—potentially higher than you’re comfortable with. For example, by the ninth year, a 4.5% rate could jump to 6.5%, and by the tenth year, it might rise to 7.5%. In a scenario where the 10-year Treasury bond yield remains below 4.5%, paying off the mortgage could be the smarter financial move.

6) You’ve Achieved Financial Freedom And Prefer Simplicity Over Profit Maximization

Once you’ve achieved financial independence, you may prioritize peace of mind over higher returns. Instead of chasing stock market gains, you might prefer the certainty of owning your home outright.

If you have enough wealth to comfortably fund your lifestyle with passive income, paying off your mortgage can be a rational decision. Even if stocks or private investments offer higher returns, the mental and emotional benefits of being debt-free may outweigh the financial upside of keeping a mortgage.

For many, financial freedom means shifting focus from capital accumulation to capital preservation and lifestyle enjoyment. After all, the first rule of financial independence is to not lose money.

Survey highlighting the highest mortgage rate U.S. homeowners say they'd accept on their next home purchase

Use Mortgage Debt to Your Advantage Until You No Longer Need It

In my 20s and 30s, I embraced mortgage debt to grow my wealth. I refinanced whenever possible, leveraging low rates to invest elsewhere. I had no choice but to make my money work harder since I didn’t have much to begin with.

Now, in my late 40s, my perspective has shifted. I’m focused on simplification. As my last remaining mortgage nears its reset period in 2026, I plan to pay it off.

Ultimately, everyone’s goal should be to become mortgage-free by the time they no longer want to or can work. When that day comes, the peace of mind from owning your home outright will far outweigh any financial argument for keeping a mortgage.

Because in the end, peace of mind is priceless.

Readers, what are some other compelling reasons for paying off a low-interest-rate mortgage that I haven’t mentioned? Have you ever regretted paying off a low-interest mortgage? If so, what was your biggest regret?

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The Only Good Reasons To Pay Off A Low-Interest-Rate Mortgage is a Financial Samurai original post. All rights reserved. Financial Samurai began in 2009 and is the leading independently-owned personal finance site today.Everything is written based off firsthand experience and knowledge. Sign up for my free weekly newsletter here.

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Business

6 Steps for Giving Employee Feedback That’s Actually Helpful

1744922536 is your helpful feedback hurting 0425 g2178407151

Opinions expressed by Entrepreneur contributors are their own.

Most leaders believe they’re giving helpful feedback. But too often, what they think is constructive comes across as demoralizing, ineffective or outright damaging. The difference? The best leaders don’t just give feedback — they coach, communicate with care, and create an environment where employees feel seen, heard and valued.

Gallup and Workhuman research shows that employees who receive valuable feedback are five times more engaged and 57% less likely to experience burnout. Yet too many leaders fall into the trap of delivering feedback in a way that crushes morale instead of driving improvement.

The solution? Feedback needs to be an ongoing, trust-based conversation, not a one-time critique. It must be framed as coaching, not criticism, and delivered in a way that accounts for more than just words. Your tone, body language, facial expressions and energy play just as big a role as the message itself.

Here’s how to be more effective at giving feedback — step by step.

Table of Contents

Step 1: Shift your mindset — feedback is a gift, not a gotcha

Leaders often hesitate to give honest feedback for fear of being seen as negative. But avoiding feedback doesn’t create a culture of psychological safety; it creates a culture of guessing and stagnation. The best employees want to grow, and they need clear, constructive input to do so.

Key shift: Move from a criticism mindset to a coaching mindset. Think of your team as business athletes. Just as elite performers rely on coaches to refine their skills, employees need guidance, encouragement and practical ways to improve.

Ask yourself:

When you see feedback as an investment in someone’s success, it changes the way you show up.

Step 2: Presence and delivery matter more than you think

The most overlooked part of feedback? How you show up.

Your body language, vocal range, gaze and facial expressions all send a message before you say a word. To curate a warm and inviting atmosphere conducive to accepting constructive feedback, adopt an open posture, connect visually, show concern and care with facial expressions that are authentic and congruent to what you’re saying, and use a conversational tone and cadence. Otherwise, they may feel tension, judgment or discomfort instead.

You silently communicate to the world all day through your body language and presence. Be intentional about how you are perceived. Convey, instead of betray, your message.

Key shift: Feedback isn’t just about what you say but how you make people feel. You need to be fully present, engaged and emotionally attuned.

What to do:

Make eye contact: Remove distractions and see the person in front of you; stay “on gaze!” Not in an intimidating way, but with warmth and attentiveness.
Adopt an open posture: To signal partnership as opposed to power, face your employee with open arms and gestures that invite conversation, seated at the same level.
Mind your facial expressions: Are you showing genuine curiosity and care or unintentionally conveying frustration?
Be intentional with your vocal delivery: Vary your pitch and pace. Speak as you would in conversation. Too fast or too slow, too high-pitched or too low-pitched, and your message may be misunderstood.

Effective leaders don’t only plan what they’ll say; they are also intentional about their presence or how they “show up.”

Ask yourself:

Is my nonverbal communication reinforcing my message, or undermining it?
Am I making this a safe, productive space for the other person to engage?

Step 3: Start with strengths, not weaknesses

Too often, feedback begins with what’s wrong rather than what’s working. But neuroscience shows that people are more open to feedback when they feel seen, valued and capable.

Starting with acknowledgment sets a positive tone and reinforces that feedback is coming from a place of support. “I always like to start conversations by sharing how my team members’ strengths have had a positive effect on our business outcomes,” says Kristi Snyder, Chief People Officer at Enthuse Marketing Group. Framing the conversation around strengths helps both parties enter the discussion with a constructive, growth-oriented mindset.

Key shift: Flip the traditional feedback approach. Start with acknowledgment before diving into areas for improvement.

What to say:

By opening with a question, you create a loop of engagement rather than a top-down critique. Employees get to explain their thinking first, which makes them far more receptive to guidance.

Step 4: Ask more, tell less

Great leaders use feedback as an opportunity to understand before they correct. Instead of leading with here’s what you did wrong, try leading with curiosity.

Key shift: Replace statements with open-ended questions to uncover insights and encourage self-reflection.

What to ask:

“What was your thought process behind this approach?”
“What challenges did you run into?”
“How do you think we could refine this?”

By letting employees talk first, you gather context, acknowledge their thinking and collaborate on solutions rather than dictate them. Approaching situations like this makes sure employees feel heard and increases buy-in.

A reminder: Acknowledgment is NOT agreement. Giving employees space to explain their reasoning allows leaders to correct misunderstandings while still respecting their perspective.

Step 5: Deliver feedback with directness and care

Feedback shouldn’t be sugarcoated, but it also shouldn’t feel like an attack. The secret? Balance directness with care.

Key shift: Avoid vague platitudes (“You did great”) and harsh bluntness (“This was bad”). Instead, use clear, actionable and supportive language.

What to say:

Instead of “Your presentation was weak,” try: “I see the effort you put in. Let’s strengthen the data to make it even more compelling.”
Instead of “You handled that customer situation poorly,” try: “I appreciate how you followed the process. Let’s explore ways to make it more adaptable.”

Step 6: Follow up and reinforce progress

The biggest mistake leaders make? Giving feedback once and never revisiting it. Without reinforcement, even the best feedback fades into the background.

Key shift: Feedback shouldn’t be a one-time event — it should be an ongoing dialogue.

What to do:

Circle back in a week to see what’s changed.
Recognize progress (even small wins) to reinforce learning.
Keep feedback alive in regular conversations, not just performance reviews.

Great leaders don’t go it alone

The most remarkable leaders and elite performers lean on coaches to hone their skills. Many of the most effective leaders actively work with executive coaches to refine their ability to deliver impactful feedback. They recognize that feedback is an art — one that can be mastered with guidance, practice and expert insight.

Feedback is meant to bring people closer and move the organization forward, but it must be delivered expertly. Mastering feedback isn’t just about what you say — it’s about how you say it and how it makes people feel. Whether you’re a seasoned executive or an emerging leader, investing in expert coaching can elevate your ability to guide, inspire and develop your team.

Feedback is your leadership superpower. Use it wisely.

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Business

Kevin O’Leary Is Ready for a TikTok Deal: ‘Clock Is Ticking’

Kevin O’Leary is ready for a TikTok to deal to get done.

On Instagram, the long-time “Shark Tank” investor posted a recent television interview (conducted in his signature pajama pants) and told his followers that the TikTok “clock is ticking.”

“We’re on our second 75-day extension,” O’Leary told Fox Business. “I speculate that there will not be a third.”

The deadline for a TikTok deal was April 5, but it was extended for 75 days a second time earlier this month. President Trump wrote on Truth Social the same day that his administration is “working very hard” on a deal to “save” the app.

In the interview, O’Leary added that he doubts any S&P 500 company would want to pay the penalty of $5,000 a user if a ban goes through, and added that any speculation of a possible lease deal was “shut down three weeks ago.” Meanwhile, the 75 days will be up in mid-June.

“Anyone who wants to buy this thing now faces rewriting the algorithm,” O’Leary said, adding that it is all up to President Xi Jinping of China and that he “hasn’t decided if he’s going to sell it or not.”

O’Leary has teamed up with billionaire former Dodgers owner Frank McCourt in “The People’s Bid” for TikTok. Reddit co-founder Alexis Ohanian has also joined the team.

AI startup Perplexity also submitted a bid to merge its business with TikTok’s U.S. division for more than $50 billion.

Amazon and Applovin also recently (separately) submitted bids.

Despite the red tape, O’Leary noted that he is “100% still interested” in buying the social media platform.

“Frank McCourt and I have been working on this for so long, we aren’t giving up,” O’Leary said.

Related: Amazon Just Submitted a Bid to Buy TikTok, as AppLovin and Other Tech Companies Make Offers Before the Looming Deadline

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Business

10 Surprising Expenses That Blindside Business Owners

Opinions expressed by Entrepreneur contributors are their own.

Most individuals and entrepreneurs start a business with the excitement of financial freedom and being their own boss to build something meaningful. Everyone knows the obvious business costs, such as rent, payroll and marketing.

However, there are hidden business costs that can erode profit margins, strain cash flow and catch even the most experienced founders off guard.

Table of Contents

1. Employee turnover and hiring costs

According to studies, replacing an employee can cost 50% to 200% of their annual salary. This factor is underestimated by many people who face further cost, workflow and productivity loss. Recruitment fees, training, lost productivity and cultural impact all add up.

The reasons why employee turnover is expensive:

This includes the fees to post a job on LinkedIn and Indeed
The commission of a recruitment agency (mostly 20-30% of a new hire’s salary)
Time spent on interviewing and onboarding
It reduces efficiency as new employees ramp up

To reduce these costs, businesses must invest in retention strategies. You must offer competitive salaries, create a strong company culture and make employees feel valued.

2. Office space and utility costs

Securing office space is a crucial decision for any business, but it’s essential to assess your needs before committing to a lease or purchase. Consider how much space you require now and how it may change as your business grows.

If you’re a startup with an uncertain future, opting for flexible office solutions like Regus, ShareDesk or LiquidSpace can be a cost-effective alternative to long-term leases. These shared workspaces provide scalability without the financial burden of a permanent office.

Beyond rent, there are additional expenses to factor in, including office furniture, equipment, utility bills, receptionist services and meeting spaces.

3. Equipment maintenance and upgrading

As an entrepreneur, you likely know the essential equipment required to provide a service or for item production. But mostly, smaller equipment is ignored. Basic office equipment includes computers, papers, desks, chairs, scanners and copiers.

From office furniture to computers, wear and tear is inevitable. Most companies neglect to replace or upgrade their office equipment, which is a bad idea. Typical maintenance costs include:

Upgrading outdated computers and software
Vehicle maintenance for delivery or service-based businesses
Repairing office equipment like printers, HVAC systems or kitchen appliances

Regular maintenance can extend the life of business assets and prevent costly breakdowns.

4. Software and subscription creep

Most businesses need software to automate communication, project management, accounting and marketing tasks. A few essential subscriptions can quickly spiral into hundreds or thousands of dollars in recurring costs.

Hidden costs include:

To save these unessential hidden costs, conduct regular audits of your software stack to eliminate redundant or unutilized subscriptions.

5. Payment processing fees

Whether you realize it or not, you are paying transaction fees if your business accepts credit card payments. Payment processors like Stripe, PayPal, and Square typically charge 2.9% + 30¢ per transaction, which can eat into profits, especially for high-volume businesses.

Other payment-related costs include:

To minimize fees, consider negotiating rates with processors. You can offer customers ACH, wire payments or pass fees when possible.

6. Regulatory compliance and legal fees

You need to stay compliant to do business in your community. Laws and regulations vary by industry. Mostly, businesses pay for:

Business licenses and permits
GDPR or CCPA compliance tools (to handle customer data)
Employee labor law compliance (HR policies, mandatory training)
Annual tax filing and bookkeeping

If you ignore compliance, this can result in hefty fines or lawsuits. It can be a cost that should never be overlooked. You must consult with legal experts and keep up with regulatory changes to prevent costly mistakes. Another way is to opt for strategies to reduce your legal liability.

7. Cybersecurity and data protection

You can’t hope that your systems are safe. Cyber threats can be expensive. A single cyber attack can cost a small business hundreds of thousands of dollars in recovery, legal fees and lost customer trust.

Hidden costs of cybersecurity come in the form of:

Installing a firewall and antivirus software, and doing security audits
Costs for employee training on phishing and scams
Ransomware recovery and lost business due to downtime
Legal liabilities if customer data is compromised

Small businesses are easy targets for cyber threats, so it’s non-negotiable to invest in cybersecurity.

8. Shrinkage and inventory loss

Retail and ecommerce businesses lose revenue due to theft, damaged goods and errors. Known as “shrinkage,” this hidden cost is overlooked but can account for up to 2% of total sales.

What causes shrinkage?

Shoplifting or employee theft
Damaged or expired inventory
Administrative errors in tracking and fulfillment

You can use a strong inventory management system software and opt for loss prevention strategies to mitigate these costs.

9. Marketing and customer acquisition costs (CAC)

To attract new customers, many businesses rely on paid ads, SEO, social media and influencer partnerships. However, the return on investment isn’t always immediate.

Hidden costs in marketing:

Rising costs of PPC (pay-per-click) ads due to competition
If the campaign is poorly targeted, it can waste the budget

To lower CAC, focus on organic growth strategies like content marketing, email marketing and referrals.

10. Time

Time is the most undervalued resource. Entrepreneurs spend countless hours on admin tasks, customer support and problem-solving instead of revenue-generating activities.

You can reclaim time by:

Automating repetitive tasks with software
Delegating or outsourcing an employee for non-core activities
Setting boundaries for yourself to prevent burnout

Your time is an investment; spend it wisely to maximize efficiency and profitability.

I recommend setting aside 20% of your revenue for unexpected expenses to prevent financial leaks before they become serious problems. Budget for the real costs, not just the obvious ones.